Furnace Installation Cost - A Homeowner's Guide.

If your current furnace is aging, unreliable, or costing you too much to run, it might be time to consider a replacement. But before you take the plunge, you're probably wondering: how much does a furnace installation actually cost in 2025?

Whether you're upgrading for better efficiency or replacing a unit that’s on its last legs, this guide will walk you through what to expect in terms of furnace installation costs, and what factors influence the price.

💰 Average Furnace Installation Cost in Canada (2025)

For homeowners in the Greater Toronto Area (GTA) and across Canada, the average cost to install a new furnace typically ranges between:

👉 $4,000 and $7,500 (CAD)

This includes:

• The furnace unit itself

• Professional installation

• Basic ductwork adjustments and setup

Keep in mind, prices can vary depending on your home, the furnace model, and any additional work required.

🔧 Factors That Affect Furnace Installation Costs

Here’s a breakdown of what influences the total cost:

1. Type of Furnace

• Natural Gas Furnace (most common in Ontario)

  • Cost: $4,000 – $7,000

  • Highly efficient and affordable to run, especially with existing gas lines.

• Electric Furnace

  • Cost: $3,500 – $6,000

  • Lower upfront cost, but higher monthly energy bills.

• Oil Furnace (less common today)

  • Cost: $5,000 – $8,000

  • More expensive to install and fuel.

✅ Most GTA homeowners choose high-efficiency natural gas furnaces.

2. Furnace Efficiency Rating (AFUE)

Furnaces are rated by AFUE (Annual Fuel Utilization Efficiency). The higher the rating, the more efficient—and often, the more expensive—the unit.

• 80–89% AFUE: Standard efficiency

• 90–97% AFUE: High-efficiency models

🔁 While high-efficiency models cost more upfront, they pay off over time in lower energy bills and may qualify for rebates.

3. Size & Capacity

Furnaces are sized based on your home’s square footage and heating needs. Larger homes need more powerful units, which cost more.

• Smaller homes (under 1,200 sq. ft.): ~$4,000–$5,000

• Average homes (1,500–2,500 sq. ft.): ~$5,000–$6,500

• Larger homes (2,500+ sq. ft.): ~$6,000–$7,500+

✅ A proper load calculation by an HVAC technician ensures you get the right size—too small and it won’t heat properly; too large and it’ll cycle inefficiently.

4. Installation Complexity

A straightforward swap of an old furnace for a new one is quicker and cheaper than:

• Changing fuel types (e.g., electric to gas)

• Replacing or modifying ductwork

• Adding new ventilation or exhaust systems

• Updating electrical work

Installation complexity can add $500 to $2,000+ to your final bill.

5. Brand & Features

Premium furnace brands or models with features like:

• Variable-speed blowers

• Smart thermostat compatibility

• Zoning systems…can cost more, but offer better comfort and energy control.

🔄 Rebates & Incentives

In Ontario, high-efficiency furnace installations may qualify for rebates through:

• Enbridge Gas energy efficiency programs

• Canada Greener Homes Initiative

• Local municipal or utility company rebates

💰 Rebates can reduce your cost by $250 to $1,000 or more, especially when bundled with other upgrades (like a smart thermostat or heat pump).

🛠️ What’s Included in a Professional Furnace Installation?

A reputable HVAC company will include the following in the quoted price:

• Removal and disposal of your old unit

• New furnace installation and testing

• Gas line hookup (if applicable)

• Basic ductwork connection

• Thermostat integration

• Safety inspections and warranty registration

🔍 Final Thoughts: Is a New Furnace Worth It?

Yes—especially if:

• Your old furnace is 15+ years old

• You’re paying high energy bills

• Your system breaks down frequently

• You want to improve indoor comfort and air quality

Investing in a high-efficiency furnace not only lowers your utility bills but also increases your home’s value and comfort—especially in GTA winters.

📞 Need a Quote?

Wondering what it’ll cost for your specific home? Contact us at +1-(289)-206-0542 for a free, no-obligation furnace estimate in the GTA. We'll help you choose the right system, explain available rebates, and install it right the first time.